HEALTH CARE/Joan Retsinas

Rich States, Poor States, Cheap States

Justice Louis Brandeis called states "laboratories of democracy."
States, though, are looking more and more like laboratories of
cheapness.

States have Brigadoon moments -- think of the presidential party
conventions, where delegates from "the great state of X" rise to
throw their state's support to a favorite son.

Outside the conventions, many states are not so much "great" as
beleaguered. They struggle with competing demands from warring
constituencies; and the poor are the weakest of fighters.

Consider Medicaid, the program that provides medical insurance
for low-income families. Before 1965, when states were solely
responsible for public insurance, many states assumed no
responsibility for health insurance, interpreting "states' rights" as
the right to ignore their poor residents. Still other states provided
minimal benefits, and paid minimal fees to providers. And some states
hewed eligibility, benefits, and payments to segregationist
doctrines.

So Congress designed Medicaid in 1965 as a state-federal
partnership. Although Uncle Sam sets floors for eligibility, benefits
and payments, states have leeway to raise that floor. Since states
pick up a percentage of the tab (roughly half, with poorer states
paying less), this seemed fair to the law's architects. In contrast,
Congress designed Medicare, which covers seniors, as a federal
program: whether you live in Idaho or New York, the rules are the
same.

Forty years later, when enthusiasm for federal programs is at a
nadir, and politicians are wooing citizens from the "great states,"
particularly the great states with lots of delegates, Public
Citizen's Health Research Group (www.citizen.org/medicaid) has
re-examined Medicaid. Their conclusions shatter the sanguine
assumption that this state-federal partnership takes care of the
poor. States may be laboratories of democracy, but they are not
laboratories of beneficence.

Eligibility is a crucial measure of effectiveness: an insurance
program aimed at the poor should cover most of the poor. But
stringent and cumbersome eligibility rules can weed out people -- on
the one hand, sparing the budget, on the other hand, dumping more
people into the ranks of the uninsured. The Health Research Group
constructed an index of "eligibility" and ranked each state according
to this index. The top score was 350. States have considerable
latitude: a person eligible for Medicaid in Rhode Island, the
top-ranked state, would probably not be eligible in Alabama, ranked
50th. Yet even Rhode Island did not score 350: it scored 296.8. As
for Alabama, it scored 91.6. The lower the score, the tighter the
net. In some states, very poor people won't get onto the Medicaid
rolls.

Scope of services was the most complex index, since it factored
in not only the "optional," non-mandated services (like
rehabilitation), but the cost-sharing and time-limitations imposed on
different categories of enrollees. The top score for scope of
services was 200, marking the most expansive scope. New York (score
158.3) ranked the highest; Mississippi (66.8), Oklahoma (71.7) and
Alabama (71.9) brought up the rear.

Reimbursement is important: in states that pay sub-market fees
physicians may refuse Medicaid patients. Alaska, Delaware and Nevada
scored highest; New Jersey, New York and Rhode Island scored lowest.

The final index -- quality of care -- was the most difficult to
construct; the Research Group used nursing home quality-of-care data.
They found that the top-ranked states (Massachusetts, Rhode Island,
Ohio, Florida, Nebraska) still scored low, while the two
lowest-ranked states (Idaho, Oklahoma) earned negative scores.

Overall, the Health Research Group considered eligibility the key
measure, and weighted it accordingly. From this mega-measure,
Massachusetts emerged, for beneficiaries, as the "best"; Mississippi,
the worst.

The rankings are no surprise. Periodically different groups issue
report cards on education, pollution, health care, welfare benefits
and services to children; and some states emerge as "better" than
others. Not surprisingly, poorer states generally score lowest.

This summer, all the presidential wanna-bes are trekking across
this country's great states, courting delegates. The standard stump
speech decries bloated or heartless or inefficient (fill in the
adjective) "big government" and praises state initiatives. Even great
states, though, have been less than great in helping poor residents.

Joan Retsinas is a sociologist who writes about health care in
Providence, R.I. Email retsinas@verizon.net.